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Of l-HE 

UMIVERSIT 



Industrial Relations Management 

as affected by 

Group Insurance 



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By 



William F. Chamberlin 
M 
Superintendent Group Department 



THE TRAVELERS 
HARTFORD, CONNECTICUT 






Copyrighted, 1922, by 

The Travelers Insurance Company 

Hartford, Connecticut 




5 T 



THE INDUSTRIAL -RELATIONS DEPARTMENT 




HE Industrial -Relations Depart- 
ment, or Personnel Administra- 
tion, is an important and insepa- 
rable phase of the whole problem 
of relationship in industry. The 
entire problem, indeed, in its final 
terms, is simply one of relationship, the relation- 
ship of employer to employee, the relationship of 
production to human effort. The professional 
cast of mind is needed to meet these problems, 
and there is being developed a leader type of 
man — engineer of humanities — to work them out 
by co-ordinating the distinct, and at times con- 
flicting, interests. 

Leadership is the fundamental function of 
personnel work. The character or standing of 
an organization of employees is determined by 
the character of its leadership; and likewise is 
the character of an industry so determined. 

To study human nature, to discover the right 
lines for co-operation and so obtain leadership, 
is the profession to be practiced by the personnel 
worker. Leadership, without question, means 
service. Only as the capacity for service grows 
will industrial-relations effort be headed in the 
right direction. This is the one supreme aim of 
industry; the making of an admirable and 
symmetrically developed humanity that will 
in turn realize the greatest economic profit. 
Industrial relations begin with employment. 



532507 



The employment department is the first letter 
in the alphabet of personnel management. The 
employment man has been fully occupied if he 
has looked well to a careful selection of the 
employees and the proper training of applicants 
so as to be ready with a competent reserve 
corps to make any necessary adjustments in 
the force retained, including at the same time 
a plan which involves promotions or demotions 
where and when necessary. 

A phase of the work which has been, during 
the readjustment period, no less-essential than 
hiring has been that of laying off. To do this 
with the least amount of friction in the producing 
departments and the least amount of resentment 
on the part of the losing employees has called 
for super-tact and judgment, for many questions 
have arisen in the case of each individual: Is 
he one that the company is more willing to part 
with than some other? Has he dependents? 
Does he reside in the community and therefore 
contribute to the business of the community? 

For the Industrial-Relations Department there 
has been, also, the important work of maintain- 
ing such essential activities as the council, the 
shop organ, and the benefit association, and of 
organizing various shop committees. 

A report of a self-appointed committee repre- 
senting the executives of a score of the largest 
industries in the United States has recently 
been published and privately distributed, cover- 
ing a thorough investigation of the relations 



The Radiating Influences of Group Insurance 



EMPLOYMENT- 



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COPYRIGHT 1922 
BY THE TRAVELERS 
INSURANCE COMPANY 



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PROTECTION 



How a Travelers Group Insurance Policy Affects the Main Interests 
of an Industrial-Relations Department in Modern Industry 



which the employer should bear to the employee. 
The following view has been expressed in a report 
of this conference : 

"Working men and the public, while recogniz- 
ing the necessity for reduction in wages, will 
resent reactionary moves such as unduly increas- 
ing the number of working hours in the week 
or eliminating the safeguards of extra payment 
for overtime and for work on Sundays and 
holidays. Reactionary moves pave the way for 
future labor troubles and antagonism or sus- 
picion toward management. The value of per- 
sonnel and employment work is apt to be ques- 
tioned during industrial depression. Any exist- 
ing frills should be cut off, but the fundamentals 
of such work are proving themselves more and 
more valuable to all corporations, and while 
curtailment of the expense of such departments 
must be expected when engineering, production, 
and sales are suffering, any decision to do away 
with the work of these departments entirely 
is most unwise, since they are able to render 
invaluable service to both employees and man- 
agement during periods of unemployment." 

THE INDUSTRIAL-RELATIONS DEPARTMENT 
AND GROUP INSURANCE 

If, then, the executives of prominent corpora- 
tions go on record as being convinced of the 
indispensability of industrial-relations activity 
in general, we are immediately concerned with 



the position held by such an institution as 
Group Insurance in regard to its usefulness to 
industrial relations. Like the industrial-rela- 
tions department, which has the double phase 
of direct concern with the well-being of the 
employee and an immediate effect on production, 
Group Insurance has a two-fold function. 

First, the problem of industrial relations not 
only has wages as its basis, but requires an 
understanding of the relations existing between 
wages and the rest of the financial framework, 
and an arrangement of a mutual agreement as 
to the fairness of wages. But over and above 
wages the worker seems to desire to participate 
somehow in the profits realized by his concern. 

This can be considered, perhaps, a logical 
expectation on the worker's part, provided he 
gives more to production than the labor of his 
hands; provided he gives co-operation and 
identifies himself with the interests and per- 
sonality of the concern and the industry he 
is engaged in. Head-interest as well as hand- 
interest on the part of employees is the desired 
attainment of the personnel manager. Group 
Insurance will function, to the pronounced 
satisfaction of the worker in meeting certain 
desires on his part for profit-interest, because it 
is simple in plan, is easily understood by the 
employee, and after his decease gives his wage 
either in whole or in part to his dependents. 

In establishments where there is no employees' 
contributory benefit fund or any Group Insur- 







ance, the employer is often obliged through 
sheer humanness to grant a death benefit to 
the dependents of an employee who has died. 
A surer method, and certainly a more business- 
like plan, is to insure the dependents of any 
employee against the acceptance of any charity. 
Further, it is better to know definitely each 
year the amount of the charge, as with Group 
Insurance, than to continue in uncertainty of 
the amount which the management is going 
to feel it necessary to pay at the death of an 
employee. 

Second^ Group Insurance functions in con- 
ditions of employment, which, generally accepted, 
are, briefly, hours and wages, health and safety 
provisions and proper working conditions, in- 
cluding fire-prevention, accident-prevention, ven- 
tilation, lighting, and sanitation. Health and 
safety are procured through education, the 
impressing of foremen with their responsibility, 
safety publicity, employees' suggestions, and 
the like. Danger from fire is reduced through 
the provision of proper aisles, exits, fire drills, 
and fire-proof containers for scrap and chemicals. 
Accidents are prevented to a great extent by 
proper attention to elevators, transmission belts, 
flywheels, punch and drill presses, exhaust fans 
and all hazardous devices. 

The maintenance of a safety committee in a 
plant is one of the strongest influences in the 
entire organization. This invites the co-opera- 
tion of the employees and holds their attention, 



because such committees are made up of their 
own comrades, and membership is considered 
an honor. The latest safety ideas and devices 
should be brought to the attention of the manage- 
ment through the safety committees, because 
an incentive for investigation is provided and 
the continued attention to developments as 
they come along is obtained. 

To all these right conditions of employment 
and personnel management Group Insurance 
adds that of mental health and freedom from 
certain anxiety. It dispels the fear of the 
unprovided-for family in case of death or poverty 
due to permanent disability, sickness, or accident. 
The mass of unskilled workers are inherently 
improvident. Only 30 per cent of the workers 
in this country are insured for more than $500. 
Of the remaining 70 per cent, 60 per cent have no 
insurance at all. It is for these who stand facing 
the last extremity unprotected that Group 
Insurance has been planned. It meets their 
need. Because these unprotected ones are a part 
of industry they may be made to benefit by a 
plan made expressly for them. For this reason 
industrial-relations managers should analyze the 
functions of Group Insurance and should consider 
it. in relation to their personnel service. 
<^To install Group Insurance is to place the seal 
of sincerity upon the entire industrial-relations 
enterprise.^ The success of this department 
cannot be measured alone by the multiplicity 
of its activities or the achievements in progres- 



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sive equipment and facilities, but must also be 
measured by the amount of actual comfort and 
peace and happiness brought to the minds of 
men and women. 

Men and women are the primary concern of 
the department of industrial relations. Men and 
women are quick to question the fairness of the 
conditions under which they must work. Our life is 
what our work is. Those of us who work whole- 
heartedly are giving our lives to our work. The men 
and women in an industrial establishment are giv- 
ing theirlives to theirwork. Theirwork determines 
the entire bias of their lives. The conditions of 
their work should provide for the needs of their 
lives. Of as great need to the provider as the day's 
food and shelter is a provision for the protection 
and care of his family or other dependents, should 
I he, the provider, be taken from them. His work 
makes possible the comfort of his wife and children 
while he is giving of his best to it; that it should 
continue to do so after death, to some extent at 
least, is certainly as fair a condition of employ- 
ment as any of the more generally considered 
conditions, such as wages or safety. 

To incorporate a plan of Group Insurance 
into the industrial-relations department, then, 
adds one more element of fairness, an element 
far-reaching in its influence on the attitude of 
the worker, the goodwill of the worker's family, 
and the ultimate effectiveness of industrial- 
relations efforts in realizing the complete well- 
being of the working organization.^ 



\ Group Insurance puts a soul into industrial- 
relations activities. It touches the most vital 
interest of the worker. It affects the worker, 
it affects the family, it affects the functioning 
of industrial relations. It moulds and holds the 
mind of the worker in channels leading to his 
greater mutual profit and happiness.N Some idea 
of the extent of its effect can be had Dy a glance 
at the chart which accompanies this argument. A 
circle is comprehensive and emblematic. Group 
Insurance is in the plane of the circle of industrial 
relations. The radii represent influences in 
the attainment of the chief ends of personnel 
management. 



3 



GROUP INSURANCE 

s At the second industrial conference at Wash- 
ington, Group Insurance was adopted as one 
means of alleviating the labor-social problem. 
The goodwill engendered between managers and 
workers through a group contract, it was sug- 
gested, in itself justifies the insurance. ^"Good- 
will is productive", says Professor John R. 
Commons, "not in the sense that it is the scien- 
tific economizing of the individual's capacities, 
but because it enlists his whole soul and all his 
energies in the thing he is doing. Since the 
13th amendment of the Constitution, the labor 
contract has become a contract terminable at 
will. The labor contract is new at every turn 
of the work being done. The laborer is bargain- 



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ing while he is working, and his tacit offer to 
the employer is the amount of work he is turning 
out." In the convention held in November 
1 92 1 by the Industrial Relations Association of 
America and also of the American Academy of 
Political Science, the outstanding thought was 
that there must be a cure for the distrust and 
mistrust prevalent in industry and that "good- 
will" must be established before industrial peace 
can be attained and maintained. It is not 
contended that Group Insurance is the one 
means of establishing "goodwill", but it is known 
that its effect to that end has been pronounced. 

In a letter to the Group Insurance Depart- 
ment of The Travelers Insurance Company, 
J. K. Wise, Manager of Industrial Relations 
at the American Multigraph Company at Cleve- 
land, Ohio, writes: 

"There is no question but that Group Insur- 
ance is one of the solutions of how to keep em- 
ployees on the job, which means improved pro- 
duction due to efficiency resulting from experi- 
ence and habit. v> The cost is small, in some cases 
running as low as one to two cents per day per 
employee. 

"In every instance the employee is the one 
who* benefits. Under the Group plan, in case 
of death, both employee and employer benefit 
before and after. First, due to the fact that 
there are no payments for either the wife or 
husband to make, and then again in the protec- 
tion present at time of death. 



V'The contentment of a group of individuals 
is a direct benefit to the community at large. 
There is no greater satisfaction than knowing 
that there is protection at time of death. Hence- 
forth, there is a pronounced improvement in the 
direction of the economic standpoint.] In our 
own case, we have found that five or our six 
payments took care of conditions where immedi- 
ate attention was required which was only made 
possible through twenty-four hours service of 
settlement. In fact, we found it thrust upon us at 
one time to handle the entire burial service, etc. 
<^~" Another fact showing that Group Insurance 
is obviously in favor with the employee is that 
approximately 20 per cent of our employees 
would be unable to buy life insurance due to 
their physical condition. Our presenting them 
with something which they are unable to procure 
for themselves, automatically shows a marked 
improvement in mental attitude. 

"The fear of charity in the event of a worker's 
death is a bugbear to those who could not procure 
protection. We had been in the habit of pre- 
senting certain of our employees with Christmas 
remembrances in the way of cash returns. 
This we discontinued at the time of our taking 
up the group insurance plan. Instead, we pre- 
sented a policy of insurance to all employees. 
These policies ranged from $500 to $2,000 
dependent upon length of service. 

"With the employees who had been receiving 
cash remembrances, this was not received the 






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way^we expected, but with those who were older 
in years and in the majority of our force, the 
return was instantaneous. Immediately there 
was a bond of sympathy welded between the 
employee and the employer and the prompt 
settlement of our first claim was the deciding 
test of success or failure. 

"The thought in the mind of the average family 
that the firm is interested in the welfare of the wife 
YJ Jj^ and children, creates a feeling of loyalty which acts 

very favorably to the interests of the employer. 
At various times we have been very pointedly 
asked as to what are the results in increased pro- 
duction through Group Life Insurance, in other 
words, dollars and cents. To my mind, this is a 
very foolish question, and we do not attempt to 
say that it has improved production plans. 
£ "We do know that a satisfied workman is a 
good workman, and that is our aim in our 
industrial-relations work. Our policy is to be 
fair and just to all, and to do unto others as we 
would have them do unto us, and we feel that 
the future will take care of itself.) 

"While we are at it, I personally want to 
thank The Travelers Insurance Company for 
the excellent co-operation and assistance they 
have rendered us at time of claim settlements, 
and I wish that I could tell you what nice things 
we have heard from our employees in regard to 
our Group Insurance plan." 

The social creed of John D. Rockefeller is 
given in a masterful statement: 



> 



"I believe that that man renders the greatest 
social service who so co-operates in the organiza- 
tion of industry as to afford to the largest number 
of men the greatest opportunity for self-develop- 
ment and enjoyment by every man of those 
benefits which his own work adds to the wealth 
of civilization." 

Only the man too busy to think sees nothing 
but the present; only the man with regrets sees 
nothing but the past; only the speculator sees 
nothing but the future. The practical economist, 
however, is the man who continuously looks 
forward, never losing sight of the past or the 
present with their unmistakable effects upon the 
future. Serious economists of today can show 
almost precisely the way to future prosperity 
and industrial peace. Good business results 
in any industry are seldom the result of accident. 
Ideal human relations will be the controlling 
influences in maintaining prosperity. The prom- 
ise of prosperity is realized to a great extent 
under relationships which are sustained by a 
spirit of goodwill. 

The adoption of Group Life or Group Sickness 
and Accident Insurance is a measure calculated to 
create goodwill in an industry. There is unlimited 
proof of this in the form of testimonials from policy- 
holders. Employers who adopt Group Insurance 
will adopt also goodwill. There is no better in- 
vestment in the interests of ultimate prosperity. 

"Look up, not down; look out, not in; look 
forward, not backward; and lend a hand." 



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7 



Appendix 



v A study of the activities conducted in the 
interests of industrial relations leads to the 
following conclusions which reaffirm the state- 
ments contained in the circular chart. 

EMPLOYMENT 
i . Recruiting. 

Group draws a high class of help, thus aiding 
recruiting. This is particularly true when busi- 
ness conditions are prosperous and when there is 
consequently more competition among employers 
for labor. It is true under present conditions 
because a worth-while employee prefers to work 
in a plant that has Group Insurance; he is the 
man of a thrifty, steady turn of mind and has 
the idea of staying permanently with the com- 
pany. And today when there is an intensity in 
the problem of labor supply, the value of a 
dependable, trained employee of long standing 
is not lost sight of by employers. 



2. Group is an attractive condition of hiring. 

Good conditions of employment must exist — 
not only for the purpose of drawing labor, but 
because only good conditions are just. The 
conditions of hiring determine with what spirit 
the new employee will enter the organization. 











When he has come to terms over reasonable 






wages and hours and is made to understand that 






as soon as he has proved his dependability he will 






be admitted into the company's plan of security 






and protection he will have no complaints to 






make on the score of his reception and initiation, x 






His passage through the employment de- 


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partment makes him an asset rather than a / 




liability. ^ <k>'/£ i^^/>» 






3. Group encourages workers to merit promotion. 






In many factories there is followed what is 






known as a system of promotions and transfers. 






The jobs have been analyzed and time-studied 






and specified to find their actual conditions, 






exactions, speed, and requirements of physical or 






mental power to the end that a status and rate 






might be given to each. Charts of the jobs 






in their promotional and transfer relationship 






are then made and placed where the employee 




may read them and locate his own position and 




see its relation to the organization as a whole. 






A man may, therefore, see just how far he has 






travelled and how much further he may go, 






or follow the transfer lines to see what other jobs 






he could do with no additional training. It is 






reasonable to assume that by other gratifying 






conditions of employment and an ever-increasing 






Group Insurance policy, the employee would be 


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strongly urged on in his ambition to move up 






a space or two each year on that promotion 






chart. 




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^ /Group leads employees who have been laid off 
to seek re-employment. 

The effect of a .Group Insurance policy in 
an organization as we have repeatedly been told 
by our Group Assured employers is an increased 
loyalty. Naturally, a man seeking re-employ- 
ment would wish to go back to his former posi- 
tion, if he held that position under the best of 
working conditions and had become accustomed 
to the fair treatment that would prevail in 
an organization where Group Insurance had 
been adopted. Next in value to an old and trust- 
ed employee within the organization is the appli- 
cant for employment who has formerly been 
employed but has been unavoidably laid off. 

£ Group Insurance to reduce turnover. 

This argument is worthy of consideration by 
employers today as it has been testified repeat- 
edly in the past that turnover has been reduced 
after the installation of Group Insurance. 
This we hold as one of the valuable effects of 
Group because with business more prosperous, 
the labor market has begun to contract, and 
competition for labor has been the result. \ 

6. Group provides an incentive for length of service. 

The same reasons that would induce a man to 
seek re-employment at his old job would encour- 
age him to remain at that work while employed. 
Moreover, since 95 per cent of our Group policies 



are on the service plan and since it has been found 
that labor turnover is always greatly reduced 
after the installation of the Group Insurance 
policy it is safe to conclude that the annual 
increase in the face amount of insurance has a 
great influence in holding a man in the service 
of the organization where his insurance has 
increased and is steadily mounting higher. 



TRAINING 

i. Group identifies the worker with the concern, 
thus aiding the training school. 

Many factories, business houses and public 
service corporations have training schools for 
new employees or a system of training on the 
job under the supervision of designated instruc- 
tors. In many instances, the training school 
is necessary because of the nature of the process 
of manufacture. In others, the training school 
is maintained because of the added efficiency 
gained by the individual. In either case, ad- 
vantage is taken of the period spent in training 
to acquaint the employee with the company 
traditions, policies and opportunities. 

The ultimate purpose of the training school 
is to impart to the employee a feeling of unity 
with the company, to make him understand 
that the company is interested not only in 
his work but in his general well-being, to identify 
him with the organization. When the employee 
has passed through the required waiting period 



and then becomes a participator of the Group 
Insurance policy along with the rest of the 
employees certainly a sure foundation for loyalty 
has been laid which we know pays the firm in the 
long run for these firms are investing for good 
profits, not conducting a system of uplift work. 

2. Group induces employees to avail themselves of 
promotional training. 

There has been much concern among those 
who are occupied with the management of 
labor over the monotony of work as it is seen 
in industries where minute subdivision of labor 
comprises the method of manufacture. It is 
realized that to people of spirit simple and 
monotonous tasks become very irksome. With 
a little practice the operation becomes habitual 
and involves very little of the thought or even 
the attention of the worker. Under such condi- 
tions it is not to be wondered at that workers 
become embittered and are ready enough to 
allow themselves to be persuaded that they are 
receiving injustice and abuse at the hands of 
those who control capital. 

One method used by many personnel managers 
to overcome in part this problem of monotony 
is to plan for promotion. Promotion, however, 
is merited only by proof of ability. This may 
be shown at the end of certain promotional 
training if the employee is not equipped to start 
with. Promotional training is conducted in 
many plants, especially in the larger corporations. 



In the same way that a man would be prompted 
to make particular efforts to attain promotion 
with the encouragement of all other conditions 
including a Group Insurance Policy, Group 
Insurance would influence in inducing him to 
register for courses conducted under a promo- 
tional training system, thus making of him a 
more efficient and loyal employee. 

3. Group Insurance by service in printed matter 
and health talks aids in general education. 

Many factories conduct some sort of educa- 
tional plan with the aim of building up the most 
efficient working organization procurable. That 
our printed matter is of great value is proved by 
the number of requests that come from our 
Assured for supplies of this material and by the 
letters of acknowledgment from those to whom 
we distribute supplies of printed matter without 
having been requested. Dr. Case of The Trav- 
elers has given health talks at factories and is 
ready to serve any of our Assured in this way 
when it is desired. The health campaign in 
some factories never lets up. Very often these 
particular organizations find this health service 
one that they would gladly make use of because 
it offers one more item of variation to be added 
to their campaign program. 

4. Group is a strong factor in Americanization. 

Americanization is a highly developed activity 
in labor management. The underlying idea 



in Americanization is to wake up the new 
prospective citizen out of his old-world lethargy 
into a realization of what American ideals stand 
for and what his opportunities are. Many 
foreigners live with large groups of their own 
countrymen in sections of towns where they 
hear no English and see no American ways of 
living so that they are not part of the new nation 
at all even if they have immigrated to a new 
country. If the employer can make such em- 
ployees understand the interest taken by indus- 
try in them the employees will the more readily 
feel their identity with the nation and will be more 
immediately concerned with the taking out of 
their citizenship papers and their significance. 

"Having specialized in Americanization work 
with many nationalities of cosmopolitan Boston, 
we felt that group insurance was particularly 
valuable from the standpoint of the immigrant 
in industry, not only as a stabilizing but as an 
Americanizing force, since group insurance is 
typically American." This was said by Philip 
Davis for ten years head of the Civic Service 
House of Boston. 

5. Group stabilizes and encourages the future of 
the flying squadron. 

In many concerns there is maintained what 
is known as a flying squadron. This is com- 
posed of a number of the younger men or boys 
and young women. These people are trained 
for service in several departments, are given 



special lectures and courses of training to fit 
them for carrying on various phases of the work. 
This makes the organization elastic in its function- 
ing because within it are to be found individuals 
who hold themselves ready for any sort of 
emergency. At the same time they are the 
material for future foremen and executives. A 
company does not like to lose an appreciable 
percentage of the flying squadron. A Group 
Insurance policy will have its effect in holding 
these younger people to their jobs since it pro- 
vides an increasing amount of insurance which 
will co-operate with the plan of promotion to 
make the future with the company worth while 
staying for. 



OPERATING 

i. Group co-operates with the management to per- 
fect light, heat and ventilation. 

The dark and unattractive workshop is the 
fate of many thousands of workers but is gradual- 
ly becoming a thing of the past. Today when 
we visit the more recently built factories, we 
are impressed by the amount of daylight that 
has been allowed to brighten up the factory lofts. 
The old idea was to have solid walls and as few 
windows as possible. All new factories seem 
to be built almost practically of glass. Often 
the impression that might be received is that 
the building itself is but a framework for glass 
walls. 



Many owners of factories of a less modern 
type regret extremely that they have not as good 
lighting and heating systems as are available 
and it is their intention to reconstruct fully their 
old buildings or erect others when the conditions 
of their business justify such measures. The 
Travelers service of inspection or consultation 
and advice such as may be obtained from our 
Engineering and Inspection Division and Re- 
search Department is ready to meet problems of 
this kind. 

2. Group arouses the interest of the worker in 
good working conditions. 

The Travelers service of printed matter in- 
cludes all kinds of health pamphlets and safety 
posters. These direct the employee's attention 
to his personal health, to healthful conditions of 
work and to conditions of safety in and around 
the factory. If the Group Insurance policy 
unites an employee with the organization he 
will become more interested in living up to the 
factory rules and regulations and in holding 
himself responsible for the up-keep of general 
good conditions of safety and sanitation. 

3. Group arranges for the service of scientific 
inspection. 

This inspection may be provided by the En- 
gineering and Inspection Division at a slight 
additional cost. Beside the Preliminary Inspec- 
tion with its recommendations on the part of 



the Travelers inspector, the service of a more 
thorough inspection by specialists of much 
experience with the Travelers organization is 
offered to the employer who is really desirous 
of constructive criticism and profitable advice. 
The use of the Travelers Engineering and 
Inspection Division is offered to all Group 
Policyholders in a consultative way without cost. 

4. Group manifests the fair spirit that will meet 
improvements. 

An employee of an organization where a 
Group Insurance policy is in force is conscious 
of a spirit of friendliness and goodwill and is for 
that reason encouraged to suggest improvements 
when he is invited to do so and will do so with 
the knowledge that his recommendation will be 
given fair consideration and action when justi- 
fiable. 

5. CGroup creates the confidence of protection which 

raises morale. 

Every increase in the economic security of a 
body of people naturally reduces cause for worry 
and directs their minds away from anxiety into 
more positive and constructive activities. With 
the fear of unprovided-for sickness and disability 
or accidental death and an unprovided-for old 
age removed, a man or woman, in a more hopeful 
disposition, may devote effort and money to the 
more gratifying pursuits of acquisition and 
saving.) irJ ^t l 






PROTECTION 

i. Group by sanitation standards and hygienic 
bulletins encourages health. 

The purpose of our hygienic booklets on 
sanitary standards is to convey certain princi- 
ples of health both to employees and employers. 
They may be used as text books in certain 
classes conducted under the educational schedule 
of factories. In any case, their message always 
reaches at least a few out of many and in this 
way the general health of the organization is 
promoted. 

i. Group through safety pamphlets and the engi- 
neering and inspection division of The Travelers 
encourages first aid. 

There are very few factories now that do 
not have a first aid service either in the form or 
a hospital fully equipped and conducted under 
the supervision of nurses or a first aid room or 
simply a first aid kit kept in some convenient 
corner for the use of the employee if the need 
arises. Our Engineering and Inspection Depart- 
ment is always up to the minute on the latest 
methods of safeguarding machinery and can 
quickly detect the possibilities of danger that 
have gone unnoticed by employers. The safety 
pamphlets and posters issued by The Travelers 
draw the attention of employees to more careful 
methods and thus collaborate with the first aid 
service provided by the organization. 



J 



3. Group brings financial relief and allows the 
greatest scope for the work of the hospital. 

In many industrial communities it has often 
devolved upon the hospital department of a 
factory to take over the family difficulties at 
the time of the death of an employee. This, of 
course, entails much expense. With the Group 
Life Insurance Policy the hospital department 
will not be subjected to sudden and unprovided 
for expenditures of this kind and will find itself 
more free to install better equipment or a new 
line of activity to be of more general benefit. 

4. Group through the Engineering and Inspection 
Division extends the use of safety devices. 

The Travelers engineers are particularly well- 
informed concerning the principles of safety 
in the operating of machinery. Because of their 
wide experience and continued observation they 
may recommend certain new devices that have 
not been thought of previously by the employer. 
Travelers safety literature induces employees 
to heed the presence of these devices and to 
make use of them. 

5. Group by illustrated accidents and first aid 
information aids in the work of accident pre- 
vention. 

It is to the interest of every concern to keep 
its accident record as small as possible. This 
for the sake of public reputation and the opinion 



y 



of the employees and for Compensation liabilities 
or the Compensation Insurance experience. The 
illustrated accidents and first aid information 
distributed through the Group Department in 
connection with Group Insurance policies should 
have the effect of reducing the number of acci- 
dents because of information imparted along the 
lines of safety and personal health. 



GENERAL SERVICE 

i. Group makes copy for the plant paper. 

The death of an employee is usually mentioned 
in the plant paper. Where there is a Group 
Insurance policy, the payment of the death 
claim may also be told of. This brings to the minds 
of the employees the value of Group Insurance and 
increases their appreciation of the arrangement. 

2. Group reduces worry and affects a greater level 
. of general happiness. 

A great philosopher has said that the measure 
of a nation's happiness should be taken by the 
number of happy individuals in it. The same 
may be said about the happiness of an industrial 
organization. It is measured by the number 
of happy individuals it contains. It is no 
little thing for a wife to know that she and her 
children are to be taken care of in the event 
of her husband's death or total disability. This 
means that the organization has become a dis- 
penser of happiness not only to its immediate 



members but has extended its happy influence 
to the family of such members and establishes on 
the part of the company a policy of willingness 
to give before it expects to get. 

3. Group decreases the necessity for much of the 
charity element of community activity. 

Among the working people there are many 
hundreds who are very near if not on the 
poverty line. Their income barely stretches 
over their needs from week to week. In the 
case of the death of the wage-earner there is 
no reserve to fall back upon and the kindness 
of neighbors or the community charity dispens- 
ers must be called upon to bear the burden 
of the expenses involved. When considering 
people in this class one of the great arguments 
for Group Insurance is that it enables a family 
to keep its self-respect at a time of misfortune 
and that meanwhile this same self-respect may 
be conserved because of a knowledge that the 
family is independent of charity. Philip Davis, 
quoted above, has watched the effects of Group 
Insurance on the welfare of a community. He 
records his observations in the following words: 
"It is a genuine pleasure to note the tremendous 
growth of the group insurance idea and movement. 

"From the standpoint of social work, this 
highly important phase of protective and preven- 
tive insurance against the hazards of industrial 
life, sickness and accident, is extremely significant. 

"Social workers to my own knowledge have 



) 



& 



again and again endorsed group insurance, and 
have advocated it for some time. 

"Personally, as the head of the Civic Service 
House of Boston, a social settlement which has 
for many years specialized in social work with 
various types of industrial groups of many 
nationalities, I have had the privilege of address- 
ing numerous industrial groups all over New 
England, and was always glad to say a good 
word both inside and outside of the plant, in 
favor of group insurance." 

4. Group decreases one of the great causes of want 
and furthers the education of children. 

In the numerous extreme cases of destitution 
of families through the death of the wage-earner, 
the older children are taken from school and 
allowed to go to work at anything that will bring 
in a little to help relieve the tenseness of the 
financial situation of the family. Where there 
are the funds from a Group Insurance Policy 
there is no sudden and excited realization of 
destitution and time may be taken to consider 
what may best be done. Meanwhile, the chil- 
dren remain at school and are taken out only after 
a thoughtful decision that this is the best measure 
in the extremity. 

FINANCE 

1. Group encourages the accumulation of savings. 

A man should take great satisfaction in know- 
ing his accumulation of savings will not suddenly 



disappear to defray the expenses and pay off 
debts in case of his sudden death, or that the 
same savings would, of course, have to be used 
in jthe case of his becoming totally disabled. 
In other words, if he has a certain purpose for 
his savings — such as the purchase of a home or 
the education of his children, that purpose may 
still be carried out to the extent of the sav- 
ings even though he is no longer living. With 
Life Insurance provided, together with Accident 
and Sickness Insurance, the employee is free 
to purchase additional insurance for life or 
property. 

i. Group supplements the provision for workers 
under Compensation. 

A Group Insurance Policy completes the cover- 
age upon the life and earning capacity of a 
workman while he is in the organization that 
carries such a policy. It secures protection 
to the employee at all times when the employee 
is not at his work, thus supplementing the 
benefits under Compensation Insurance. 

3. Group creates goodwill that will facilitate ad- 
justments. 

At the head of the list of labor problems always 
stands the item — wages. This is the most 
frequent bone of contention. It is usually at 
the bottom of every industrial dispute and mis- 
understanding arising, as is illustrated by the 
recent railroad strikes and threats of strike. 



Hours come in as a pretty close second. These 
two conditions of industry have always been the 
basic ones, have always given rise to much 
discontent and misunderstanding, have occupied 
the attention of the foremost leaders of labor 
and management and economic thought for 
over one hundred years, and as yet no definite 
measure has been found that all agree is under 
all circu'Astances equitable. 

In the best run organizations where the fairest 
spirit prevails, questions on these points are 
bound to come up. This is both natural and 
wholesome. With the progress of an industry 
and the progress of the man within that industry, 
new adjustments must continually be made. 
It is the spirit with which both sides meet each 
other that determines how much trouble will 
be involved in the effecting of a readjustment. 
Group Insurance in itself accomplishes a condi- 
tion of goodwill among employees and between 
employees and the employer. Moreover, the 
very fact that the employer has seen the justice 
of installing such a policy indicates to employees 
that the spirit of fairness prevails and that a 
fair complaint will receive a fair adjustment. 

4. Group may be used as one means of profit 
distribution. 

One of the five main rights of industry already 
alluded to is an equitable method of profit 
distribution. The question of profit distribu- 
tion is always up. Some one is always devising 



a new method of practical profit distribution but 
the results are usually found to be impractical. 
However, one safe form of profit distribution, 
be it that the distribution is only a very small 
part of the profit, may be that of provision for 
protection. After all, the distribution of profit 
should bring to the wage-earners who have made 
that profit possible an added amount of money 
and an added freedom in the use of th^ft' money. 

In purchasing a Group Insurance Policy for 
his employees, the employer is releasing to the 
employee certain funds of money. If we con- 
sider that the Group Insurance is accepted by 
the employee as a substitute for Life Insurance, 
we argue for Group Insurance that it is a just 
measure because it provides one of the necessities 
of life for people at easier terms than they could 
provide it for themselves were they standing 
alone. Regarding Life Insurance as a necessity, 
we assume that it is one of the things that under 
our present condition of civilization a man should 
consider as his birthright. 

Effective Profit Distribution by whatever plan 
must not be regarded in any sense a substitute 
for the payment of the full going rate of wages. 

In order that profit distribution may be most 
effective, it is important that a fixed basis or 
plan of distribution be announced in advance. 

The amount distributed should be sufficiently 
large to stimulate and hold the interest of the 
employees. 

Forms of profit distribution are bonuses. 



Sickness, Compensation Insurance, thrift, home 
and stock ownership and pensions — these fea- 
tures are fast coming to be regarded as legitimate 
items of operating expense. They are an addi- 
tional reward to the employee over and above 
his regular wage and are entitled to classification 
as forms of profit distribution. Understand, 
here, that we are not considering the principle 
of profit sharing. The distinction between 
profit distribution and profit sharing is that 
profit sharing bears a certain definite relation 
in percentage to the actual profits made on 
the business. Profit distribution is a pre- 
determined amount fixed at the will of the man- 
agement usually with the right reserved at any 
time to withdraw the benefits accrued and make 
a new arrangement. 

Sickness Compensation through an adequate 
plan for wage-earners as well as for salaried em- 
ployees is especially a desirable method of dis- 
tributing profits. It is effective in promoting sta- 
bility of employment and loyalty of employees. 

Group Insurance is effective in promoting a 
feeling of security in the minds of employees 
by removing one of their causes for worry. 
It furnishes a uniform and consistent method 
of making payments to surviving dependents. 

5. Group encourages the buying of stock and 
stock ownership. 

Many companies make it possible for its 
employees to purchase company stock on easy 



terms but as labor becomes more educated and 
so increasingly realizes the economic value of in- 
surance, it will be more and more insistent upon 
having insurance — Life, Accident and Sickness. 
With a Group Insurance Policy installed in a plant 
the employees no longer need to take thought for 
paying for their Life Insurance and are in a better 
position to take advantage of the opportunities 
offered by the company to purchase stock and 
shortly realize the profit equal to that received 
by outsiders but bought at far less cost. 

6. Group is independent of any bonus plans. 

Bonus plans are of great use in many plants, 
as a system of payment for increased production 
or unusual attendance records, and are greatly 
used to promote the interest of the employee in 
the organization. These bonus plans are real 
pay for one service or another. It is only fair 
that the systems should be highly developed 
and enforced so that each man and woman will 
receive pay in proportion to what he or she 
brings to the work of the organization. A 
Group Insurance plan in no way disturbs these 
systems in their working. It covers all or all 
of any class impartially and its benefits are 
automatic. It is simply another fair turn in 
the conditions of employment. 

7. Group clears the way for home ownership. 

In line with what we have said concerning 
the making possible of accumulations of savings, 











the Group Policy is a great encouragement in 






the purchase and ownership of a home not only 






because of the financial let-up but because 






Group while encouraging continuity of employ- 






ment thereby encourages the ownership of a 




1 


home. 


- 




This outline is intended to show the relation- 






ship between Group Insurance and other industrial 






relations activities. We have considered this in- 






surance in the light of the interests of the employer. 






Naturally , an employer who finances an industrial 






relations department is interested in that depart- 






ment second only to production. Today employers 






must consider their employees first — over and above 






the interests of industry. 






The employer is as much concerned with human 






measures as with efficiency schemes in production 






control. This for the two reasons that industry is 






developing a heart and that consideration is pro- 






ductive. For these reasons employers in daily in- 






creasing numbers are finding a gratifying use for 






Group Insurance. In the contract itself there are 
innate values and benefits^ and protection for 
employees at the smallest cost known in the entire 
insurance field. 

42275 




• 







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MAR 2 3 1956 LU 






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General Library 

University of California 

Berkeley 



GAYLAMOUNT 

PAMPHLET BINDER 



Manuf acturod by 

IGAYLORD BROS. Inc. 

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Stockton, Calif. 



